Pre-nuptial agreement prevents wife from retaining London house but EWHC forbids husband to move back into it

The couple married in September 2005, when the husband had net assets of GBP32.5 million, including a seven-bedroom house in central London that was then worth GBP3 million and is now valued at GBP9.5 million. He insisted that the wife sign a pre-nup before the marriage and both instructed solicitors.

Ultimately, it was agreed that the wife would be entitled to GBP500,000 for each complete year of the marriage, to a maximum of GBP12.5 million after 25 years. She would also receive half the London property on the eighth anniversary of the marriage or the arrival of children if earlier. Alternatively, she would be entitled to half the increase in the value of the net assets during the marriage if that sum was greater, although the award would be capped at 42 per cent of the husband's net worth. Child maintenance would be set at GBP60,000 per annum per child plus school fees and medical expenses.

The marriage broke down in February 2019 and the wife petitioned for divorce that October, leading to a decree nisi in April 2020. The husband then made her an open offer of GBP7 million and to permit her to remain in the London property until the end of 2030, whereupon they would split the sale proceeds equally. The wife rejected this and two further offers and he issued a Notice to Show Cause why her application for financial remedies should not be dealt with in accordance with the terms of the pre-nuptial agreement.

The wife argued that, first, the pre-nuptial agreement was executed five years before the UK Supreme Court's definitive judgment in the Radmacher-Granatino case and was thus invalid. Second, the agreement was vitiated because she had been put under undue pressure at the time, as her husband had said there would be no marriage without an acceptable pre-nuptial agreement. Moreover, she said, it was unfair and did not meet her needs. She sought a settlement of GBP18.1 million out of the GBP46.3 million matrimonial assets and insisted that she and the children must continue living in the London home.

The EWHC largely rejected these arguments. It is not unfair or undue pressure, the judge said, to state that you will not get married without an acceptable pre-nuptial agreement, as the ability to apply for financial remedies after the breakdown of a relationship is entirely dependent on there having been a marriage. 'A wife cannot secure the right to apply for financial remedies via a marriage by signing a pre-nuptial agreement only to renounce the agreement thereafter on the basis that she only signed it because he said there would be no marriage if she did not', he said. Nor could the fact of there having been a 'furious row' about the pre-nuptial agreement vitiate the agreement, because it did not necessarily amount to 'undue' pressure. Moreover, he said, there had been full disclosure of assets and the wife had had 'top-quality legal advice' when making the agreement.

The judge also said the wife's wish to retain the GBP9.5-million London property she occupied with her children did not make the pre-nuptial agreement unfair. He rejected her demand to be allowed to continue living there. The financial remedy award under the pre-nuptial agreement was sufficient for her to obtain an 'entirely suitable' alternative property and also provided a reasonable level of provision for her income fund. 'There is absolutely no reason for her to retain a property worth GBP9.5 million, just because the children have lived there throughout their lives', he said, noting that children adapt to change and move house when their parents move house.

'There is no vitiating factor in this case that means that this PNA should be ignored; nor is there any factor that means that I should give it less weight than would otherwise be the case', he said. 'Litigants must realise that it is a significant step to instruct top lawyers to prepare a pre-nuptial agreement prior to marriage'.

However, he also forbid the husband to reoccupy the London house, which he had bought before the marriage and which was still in his sole name. It would be very bad for the children, said the judge, if their father moved back in to the house after they had vacated it, and this should not occur. ‘I am clear that he should not move back in. The property will be subject to an order for sale', he ruled (MN v AN, 2023 EWHC 613 Fam).

Sources

• BAILII